• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 5 days The United States produced more crude oil than any nation, at any time.
  • 10 days e-truck insanity
  • 10 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 6 days How Far Have We Really Gotten With Alternative Energy
  • 9 days James Corbett Interviews Irina Slav of OILPRICE.COM - "Burn, Hollywood, Burn!" - The Corbett Report
  • 9 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 10 days Biden's $2 trillion Plan for Insfrastructure and Jobs
  • 10 days "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

More Info

Premium Content

Oil Prices Dip As Further Interest Rate Hikes Loom

  • Oil prices slumped early on Thursday morning after Jerome Powell told Congress that further interest rate hikes are coming.
  • Ahead of the EIA’s weekly inventory report, WTI was trading at $71.12 while Brent had fallen to $75.67.
  • The Bank of England surprised markets with a large interest rate hike as the UK continues to battle inflation.

Oil prices slumped by 2% early on Thursday after Fed Chair Jerome Powell told Congress that further interest rate hikes are coming in the second half of the year after a pause last week.

As of 8:11 a.m. EDT on Thursday, ahead of EIA’s weekly inventory report, the U.S. benchmark, WTI Crude, was trading at $71.12, down by 1.92% on the day. The international benchmark, Brent Crude, was falling by 1.84% and traded at $75.67.

On Wednesday, Brent settled at above $77, the highest settlement since May 24, as the U.S. dollar fell. But prices resumed their slide early on Thursday.

Fed’s Powell on Wednesday told Congress in his half-year testimony on the economy to lawmakers that further rate hikes would be necessary to fight inflation. Powell’s testimony continues later on Thursday, and additional comments could also sway oil, equity, and bond markets.

Commenting on last week’s decision to hold interest rates unchanged, for now, Power said, “We didn't use the word pause and I wouldn't use it here today.”

The outlook for two more rate hikes by the end of 2023, included in the Summary of Economic Projections released by the Fed last week, “is a pretty good guess of what will happen if the economy performs about as expected,” Powell said.

“Powell has implied that the Fed’s mantra is now curbing inflation over negating the possible adverse after-effects on economic growth from tighter credit conditions,” Kelvin Wong, senior market analyst at OANDA, said on Thursday.  

In Europe, the Bank of England on Thursday surprised markets with a large 50-basis-point interest rate hike, the 13th consecutive increase, after inflation data from Wednesday showed the UK’s May inflation was stuck at an annual 8.7%, flat compared to April and higher than expectations.

Apart from interest rate chatter, the market will be looking today at EIA’s weekly oil inventory data, after the American Petroleum Institute (API) estimated on Wednesday a decline of 1.246 million barrels in crude oil inventories in the United States, against expectations of a smaller 433,000-barrel draw.

By Charles Kennedy for Oilprice.com


More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment
  • Mamdouh Salameh on June 22 2023 said:
    The prospect of more interest rate hikes by the US Federal Reserve adds to fears of one or two more US commercial bank collapses triggering a global banking or financial crisis reminiscent of the 2008 subprime financial crisis.

    That is the very one factor behind the weakness of oil prices over the last four months despite Western disinformation’s futile attempts to shift the blame to so-called slowdown in China’s economy.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News